'Few' interest-only borrowers have capital payment plans

A new study has revealed that many borrowers have very few ideas regarding how they are going to pay back their loans.

This lack of financial planning highlights the need for people who are embarking on a self build to ensure that they have calculated and planned the project as much as they can and have sought expert financial advice.

The research conducted for LV= has revealed that half of the UK's 2.9 million interest-only mortgage holders have no specified investment vehicle in place in order to begin to repay the loan.

This equates to 45 per cent of all interest-only mortgages or 1.3 million loans.

Mike Rogers, chief executive of LV=, advises these people to "seriously consider investing as much as they can now" in order to "help pay off the mortgage capital at the end of the term".

A traditional type of self buildmortgage is different from normal mortgages and is released in stages.